Canadian animator snapping at Pokemon's heels

July 1999

BY LOUISE SURETTE
CALGARY HERALD

TORONTO - Hoping to ride the billion-dollar frenzy of the children's phenomenon Pokemon, Canada's largest producer of children's animation has nabbed the rights to the next hot Japanese television series.

Toronto-based Nelvana Limited announced on Thrusday the purchase of the North American television distribution and merchandising rights to a 70-episode Japanimation series called Cardcaptor.

Geared to girls between six and 11, Cardcaptor airs on hte Japanese television network NHK, and features a precocious girl named Niki, animated in a similar fashion to the recently popular Sailor Moon series for girls.

If it achieve anything close to the success of Pokemon - which is expected to generate more than $2 billion in revenue in North America this year - the Cardcaptor series could top the $1.5 billion mark in 2000. That's when the trading cards, merchandise, collectibles and a TV series arrive, company officials said.

Michael Hirsh, Nelvana's co-chief executive officer, says that because of the popularity of Pokemon and the attention is has caused in hte market, there was intense bidding for Cardcaptor - owned by Kodansha, a Japanese multi-media publisher.

Financial terms were not disclosed but the company said it would retain 100 per cent of all broadcast license fees and will act as U.S. and Canadian merchandise licensing agent for Cardcaptor.

"We are hopeful that we can build it into a sucessful brand in North America," Hrish says.

"It is premature to guess or estimate how big this will be but we think it has a lot of the important elements and there is a clear niche in the market place."

The Japanese sensation Pokemon, a group of 150 colourful cartoon characters each with its own name and personality and special powers, is directed primarily at preteen boys. But Cardcaptor will be for girls.

The show uses a deck of magical cards as the basis for adventures by Niki and her sidekick Kero. Licensing rights for the Pokemon series are owned by the American company, 4 Kids Entertainment, which had 90 licensing agreements with manufacturers of toy, computer games, cards and books.

Although the merchandise is relatively new in Canada, Pokemon products have topped more than $6-billion in Japanese sales.

But just because the Pokemon series has done well doesn't necessarily mean another similar one will, says Karen Fisman, an entertainment and broadcast analyst with First Marathon Securities.

"If one thing works it doesn't mean the next thing that is like the first thing is going to work," she says."

"If there is a formula you are trying to copy, sometimes you are doomed to failure. They are also dealing with kids, where by one day something is hot and the next it's not."

Nelvana will have a deal with a merchandising company before choosing a U.S. broadcast window to target, Fisman says.

"Nelvana is already in discussion with toy companies because it has already been on the air in Japan and done very well.

"In conjunction with the toy company, it will then chose a network which will probably work very well for them," she says."

But ultimately the sucess of merchandising will be driving be the sucess of the television series."

Hirsh says generally products that are promoted through a television show are more sucessful than generic products.

"If you have a merchandising line based on a successful television show then the characters become important to the children and they want it in their environment as a T-shirt or a toy of something like that."

The Calgary Herald, July 1999